Tesco tackles waste Article icon

Tesco Tesco has launched a groundbreaking initiative to tackle food waste that moves along the supply chain to its customers' homes

It is not every company that will put its hands up and confess the error of its ways but, in its new spirit of transparency, Tesco has just become the first retailer to reveal how much food it wastes across its operations.

The startling admission that it wasted 28,500 tonnes of food in stores and distribution centres during the first six months of the year is part of Tesco's new strategy to tackle food waste across its supply chain.

'We didn't know that it would be really important for us to disclose operational food waste,' explains corporate responsibility director Josh Hardie. 'But in our discussions with key stakeholders, it emerged it was one of the most significant things we could do.'

The revelation followed an eight month examination into the issue of food waste, which currently costs the average family £700 every year, by the supermarket group. 'Over the past year, we have tried to change the way we approach corporate responsibility,' explains Hardie. 'We fund projects in local communities, investing up to two per cent of pre-tax profits last year, but these do not add up to a strategy. More than ever customers want to know what a business stands for and its social purpose.

'It is also becoming increasingly clear that global issues cannot be solved by governments or non-governmental organisations (NGOs); they need real cooperation and serious thinking by business. We had to think about what were the issues that really mattered to us as a business, and that our colleagues cared about and could relate to.'

The three key issues, which have been repackaged as Tesco's Big Ambitions, related to health, selling food that could make a real difference to healthy lives; providing opportunities for young people; and food waste.

'Over one third of the world's food production is wasted. That's a frightening statistic at a time when there is a scarcity of resources,' explains Hardie. 'Even in the most efficient organisation, there is food waste. We have an absolute determination to provide affordable food and intuitively there is a cost implication from this waste.'

Sustainability is the key to success for today's business. Tesco recognised that tackling food waste was a major step towards becoming a sustainable business. It pulled together a team of 20 directors from across its operations, including personnel, sourcing and international, who spent four to five months examining the issue.

'We then held a series of discussions with 80 key stakeholders, such as NGOs, Waste Watch [now part of Keep Britain Tidy], WRAP and individuals like Tristram Stuart [a campaigner awarded the international environmental Sophie Prize for his work on solving global food waste],' explains Hardie. 'We took a forensic approach, talking to the people who really understand this issue because we knew that, in order to define our role, we had to properly understand the issue. We held a very open dialogue asking What do you think we should do? It was incredibly helpful; they said it was really important for us to disclose our operational waste. If we are to make a difference, we have to share what we know - that vastly outweighs any concerns about sharing slightly sensitive data.'

Engaging suppliers

These stakeholder discussions prompted talks with suppliers to the business. According to WRAP, less than one per cent of food is wasted in retailer operations, with the majority occurring in the supply chain and in customers' homes. 'It was clear that we have a shared responsibility for this waste irrespective of where it occurs and the solutions lie in working in partnerships with our producers and suppliers as well as helping customers reduce waste in their homes,' says Hardie.

Tesco worked particularly closely with WRAP, which had been trawling data to analyse where waste most occurred. WRAP's hot spot analysis identified 25 grocery products, such as apples, bags of salad and bread, which were the most wasted. Tesco further analysed these products, engaging with producers and suppliers, to create an overall food waste 'footprint' for each, and develop waste reduction action plans.

For example, it discovered that 68 per cent of bagged salads end up being thrown away, and 35 per cent of this waste occurred in the home. As a result, Tesco announced it would end multi-buy offers on large bags of salad and would develop mix-and- match promotions for smaller bags to help customers reduce the amount wasted at home.

Similarly, four in ten apples are wasted but customers throw away just one of these. The waste occurs in orchards and other parts of the supply chain. Tesco is now working with growers on trials to reduce pest and disease, along with offering advice to customers on storing apples in the fridge to make them last longer. A new Real Food microsite offers recipe ideas to use up products, practical tips on storage and promotions.

Some solutions relate to the way Tesco works with its suppliers. 'We can offer guarantees that we will take the same proportion of their crop each time, or that our orders stay consistent,' says Hardie. 'These are things that help our suppliers manage their waste. The hot spot analysis enabled us to be really analytical and ask Where is the waste occurring? What can we do to prevent it? We can speed up the supply chain, getting products in-store quicker, which may involve more local sourcing. Or we can strengthen our relationships with suppliers, making them long-term partnerships, using better forecasts for our needs and guaranteed ordering to give them confidence.

'And if we order more apples, say, than we can use, we can look at our shops in central Europe. We have the scale and we should use it more effectively. Or we can look at distributing potential food waste to people in need in local communities, working with redistribution charities. It's about sending zero food waste to landfill sites.'

Other solutions relate to in-store operations. 'We discovered that bananas are more appropriately stored in hammocks in store to prevent them affecting other fruits,' adds Hardie. 'There are lots of specific things we can do that will make a difference to waste levels of products.' Time stamps are confusing, for example, with 'best before', 'use by' and 'display until'; Tesco is looking at one single 'use by' date to help customers and has removed 'display until' on fresh produce and meat to avoid confusion for customers. Similarly, 600 in-store bakeries are being to reduce the amount of bread on display after Tesco discovered just under half of all bakery products are thrown away.

Being open and transparent

'If we want to have an impact on this issue, we have to say it's an issue in the first place,' says Hardie. 'We're trying to help our customers, who waste about £700 a year on food. If we can help them to save that money, then that makes them more loyal to use and appreciate that we really do care for them. Whether those savings get spent with us, that's a different matter.'

Tesco's announcement about tackling food waste coincided with a speech given by chief executive Philip Clarke at the Global Green Growth Forum in Copenhagen, when he described the initiative as 'making a difference from the farmer's field to the customer's fridge and beyond'.

He added: 'We are the world's third largest retailer, so clearly we have a responsibility to minimise the food wasted in our stores. However, we sit at the heart of the value chain and this gives us a crucial vantage point and a shared responsibility to act far beyond the doors of our stores.'

'This was a very interesting media campaign,' explains Hardie. 'But what is interesting is that we didn't treat it as a media campaign. We care about this issue, and we wanted to share what we know about it. If you watched the flow on stories on the day we announced our strategy, it was the journalists having the conversation, not us. They were saying What Tesco is doing is interesting and it's needed, and the debate changed. Journalists took a look in their fridges and wrote about what they wasted. They helped it become a debate about food waste rather than a story about Tesco. And our colleagues really like working for a business that is taking the issue seriously.'

The next step in the campaign, according to Hardie, is 'more of the same'. 'We are going to keep talking to stakeholder and suppliers looking at how we can act to make a difference. We now understand the issue and can help suppliers solve the problem. We are working to build a simpler and sustainable supply change that, in the long term, will make a real difference'.